‘That is what I intend to achieve, come hell or high water’
By Mbatjiua Ngavirue
The driving force behind the proposed new Witvlei Feedlot, Sidney Martin, says the aim of the feedlot is to ensure that Namibian beef producers receive better prices for their animals – not worse.
He says international beef prices will determine the price the company pays to local producers – not the price of maize in South Africa, as is currently the case.
If international meat prices rose, the company would pass the benefit directly on to beef producers.
“Why should the price of Namibian weaners be determined by the price of maize in South Africa,” he asked.
Because of a poor maize harvest in South Africa, Namibian beef farmers are currently receiving rock-bottom prices for their weaners at auctions – almost having to sell at give-away prices.
These low prices have a major impact on people’s livelihoods, because according to estimates 70 percent of Namibia’s population depends on agriculture for their living.
Of this 70 percent, at least 80% depend on livestock or small stock farming.
Martin charged that over the last 20 years, farmers had not received the benefits of growth in the over-all economy, in fact becoming poorer.
“That in itself tells you there is something wrong in the system. What is the difference between farmers receiving N$800 for a weaner 20 years ago and N$3,000 now, given increases in input costs and general inflation.”
The cost of imports generally, as well as the cost of farming inputs such as diesel, licks, fencing materials and pipes had all risen drastically.
“What I want to do is to link the price paid to beef producers to international prices, so that if the price of imports increases, then farmers’ incomes keep pace. That is what I intend to achieve, come hell or high water.”
He vaguely alluded to the fact that in the past, exporters have not always passed on the benefits of high international beef prices to producers.
Martin tried to allay fears that the current moves both by his company, and Meatco, might in the end disadvantage Namibian beef producers.
The main fear among local farmers appears to be that once the feedlots are in place, the government might stealthily introduce a large stock equivalent to the Small Stock Marketing Scheme.
In terms of this scheme, government has placed strict export restrictions on small stock.
Government initially proposed a plan whereby farmers would have to slaughter nine small stock for each one exported – later reduced to six, and now as a drought emergency measure to three for each export animal.
The net result of the restrictions is that small stock farmers have to accept lower prices for their animals than prices paid on the South African market.
Martin dismissed these fears, saying that because the company will export the final product he can see no reason why prices will not be comparable, or better, than those paid in South Africa.
Furthermore, he said the company would buy livestock at open auctions just like any other buyer, and adhere to free-market principles.
He however conceded that he could not comment on whether government has plans to impose export restrictions on weaners, or not.
The companies in the group, including an abattoir and tannery at Witvlei, are all fully export-orientated bringing about synergies the feedlot will benefit from, and above all earning Namibia valuable foreign exchange.
The conventional wisdom was always that feedlots are not viable in Namibia because of the high price of producing feed locally, and transporting it from South Africa.
Martin however pointed out that feed only accounts for 24% of feedlot costs, of which maize makes up a very small percentage, and Namibia had other raw materials the company could use.
“The feedlot will stimulate a secondary economy for grass, lucerne and maize producers in the country. Whatever they produce, we will be happy to buy.”
He noted that projects under the government’s Green Scheme Programme currently sit with surpluses, for which they cannot find a market but they could now potentially supply local feedlots.
They will also source products such as hominy chop locally from Namib Mills/Voermeester but if they cannot source locally, they will go outside the country’s borders if necessary.
A key figure in the Witvlei Feedlot project is Dr Hantie Lombard. Dr Lombard was involved in South African feedlots, feeding as many as 85,000 animals at any given time.
“I have the expertise and the capacity necessary to run this feedlot successfully,” he said. The Witvlei Feedlot which represents a N$250 million investment plans to fatten 60,000 weaners a year, while creating an estimated 120 jobs at full capacity.
Chairperson of the Livestock Producers Organisation (LPO), Ryno van der Merwe, said that in terms of job creation and value-adding a feedlot represented a positive development.
“I will increase throughput at local abattoirs, and if you can add a lot of value in the EU market, or other niche markets, then it might be financially viable,” he said.
The LPO, he added, did not want to be negative about the project but felt it needed to mention some concerns by producers to the government.
“We will be satisfied as long as the feedlot does not put restrictions on free-market principles, and producers must still have the choice of where to sell for the best price.”